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(Deposit photos)
(Deposit photos)

Minnesota’s shadow workforce

Editor’s note: This is the first article of a four-part series from Finance & Commerce.

Life hasn’t always been easy for Hilaro Flores.

A native of Mexico, the immigrant construction worker now living in Minnesota lost his mother when he was a young child. His father couldn’t take care of Hilaro and his four siblings, so the kids were sent off to live in different homes.

“They used to send me [to be with] my grandmother, but I missed my mom so much that I used to run to my empty house and look for my mom,” Flores said as he wiped away tears during an interview with Finance & Commerce.

Flores’ adult years brought challenges of a different sort. Struggling to make a go of it in the food business in Mexico, he headed to the U.S. in 2002. The game plan? Work hard, save more money, and go from there to bigger and better things.

Undaunted by the cold weather, Flores ended up in Minnesota, where the construction industry beckoned with promises of living wages. But the road to the good life quickly took a wrong turn for the 46-year-old after he crossed paths with a labor broker.

Through an acquaintance, Flores hooked up with a broker who put him to work on Minnesota construction jobs. Paid in cash and living in squalor with other immigrants, Flores says he was ushered into a system where workers faced abuse, unsafe conditions, threats of violence, and 12-hour days, including weekends, with no overtime.

Flores estimates he was cheated out of $40,000 during the past three years, including unpaid overtime and stolen wages. Now he’s out of work and looking to regroup. The father of a 9-year-old daughter told Finance & Commerce that he lost his job on a Twin Cities construction project because he complained about not getting paid.

“We came with a big dream to be better in the U.S., but sometimes it’s worse than our own country,” Flores, said through an interpreter.

As harrowing as his story is, Flores is one of the luckier ones. Multiple other Minnesota workers have told similar stories of unpaid wages, unsafe working and living conditions, and threats at the hands of unscrupulous brokers.

Minnesota lawmakers took note last spring when they passed a wage theft bill that includes increased funding for enforcement and stiffer penalties for labor trafficking. (More on the impact of the wage theft law in the fourth part of this series).

Experts say it’s hard to measure exactly how prevalent wage theft and worker exploitation is in Minnesota. Oftentimes, the workers are paid under the table and live in the shadows — and they’re afraid to speak up. Many are here illegally.

“You are basically asking: How much crime is there?” said Aaron Sojourner, a labor expert with the University of Minnesota.

“Criminals don’t report to the government or official state agencies when they commit their crime. In fact, they work very hard to hide it, so it’s not an easy thing to measure,” he said. “We do surveys of the general population and we ask them, ‘Have you been victim of a crime during this year? Has this happened to you?’

“In these cases it’s much harder, because we don’t do those kinds of surveys systematically. We don’t go out and ask the population about health and safety violations. We don’t ask them about wage theft systematically,” Sojourner said.

Jessica Looman, executive director of the Minnesota State Building and Construction Trades Council, concurs.

“You are trying to define ‘big,’” Looman, a former Minnesota Department of Commerce commissioner, said in an interview. “The truth is every exploited worker is a big problem. If we have a system that allows a worker to be exploited, it is a big problem.”

Traditionally, wage theft and worker exploitation have been out-of-sight, out-of-mind for most Minnesotans. People have just recently started to think about wage theft as something more than a minor issue, Looman said.

“The issues we are seeing — that are so heartbreaking and detrimental to our communities and our economy — are people who are actually exploiting workers and have a business model of, ‘Try to catch me as I steal money from workers, as I abuse workers, as I don’t provide them with workplace safety, I don’t provide insurance, workers comp. I am going to make as much money as I can on the backs of these workers and there is nothing you can do to stop me.’

“We are just trying to say, ‘That is not OK in Minnesota.’”

Flores, for his part, expected more from Minnesota.

Wearing a neat, button-downed shirt and sitting ramrod straight during an hourlong interview, Flores told his story at the headquarters of the North Central States Regional Council of Carpenters in St. Paul.

Flores said the labor broker he worked for set him up with jobs on a number of Twin Cities construction sites.

A recurring theme was money. Cash payments from the broker fell far short of what he rightfully earned, Flores said. Other workers were in the same predicament. Flores estimates the broker had about 300 people in his stable of workers.

More often than not, immigrant workers are afraid to speak up and request what is rightfully theirs for fear of retaliation or even physical threats against themselves or their family members, he said.

“When you intimidate a guy, and threaten a guy with hitting him or killing him or doing something bad to him or his family, they just leave and never claim what he owed them for money. That is how he takes advantage of the workers,” Flores said.

Others have similar stories.

In September, the Roseville City Council granted a developer’s request for tax increment financing. Before the vote, the council got an earful from two Hispanic construction workers, who alleged they were mistreated by a labor broker on one of the developer’s previous projects. (The council approved the subsidy with the understanding that the city could withhold payments if the developer violates labor standards, including wage theft violations).

At the meeting, the workers testified that a labor broker put them up in dilapidated, overcrowded housing and threatened them with violence.

Eric Israel Macias Arevalo said he worked for the broker on construction jobs throughout the Twin Cities and was expected to put in 12 hours a day, seven days a week, without overtime. Arevalo said the broker forced him and his family to live in a single-family house with 15 to 20 other workers.

“They offered me a set price to start working, but once I was working for them they started lowering the price of my wages,” Arevalo said through an interpreter. “And he would stop paying, telling us he didn’t have the money to pay us.”

Arevalo said he filed and then withdrew a complaint to the Minnesota Department of Labor and Industry after the broker threatened to kill him, his wife and his kids.

“After that, I wasn’t feeling safe,” Arevalo said at the meeting. “I asked myself, ‘Why was I being threatened if I was just making an honest living?’”

At the same meeting, Samuel Cicero said he was working in North Dakota when he accepted an offer from a labor broker in Minnesota. The broker promised higher pay and a better future in Minnesota, he said.

The change of scenery didn’t turn out well, he said. Cicero told the City Council he was stiffed out of two weeks of pay and is still trying to collect the money. Numerous other workers were in the same predicament, but were afraid to speak up, he said.

“We came to get a better life, but unfortunately it was one of the lowest points we have been in,” he told the council.

Flores opened up about his story during the interview with Finance & Commerce.

Since losing his construction job, Flores has been trying to collect unpaid wages. He can’t afford an attorney, but the carpenters union has been helping him navigate the system in an effort to get paid, he said.

Even so, the construction industry, which desperately needs workers, has left a bitter taste in his mouth. Perhaps, he says, a return to the food business — and more reasonable working hours and conditions — is in his future

“My idea now is to maybe try to collect the money that they owe me and start my own business making food, because I am pretty good at that,” Flores said. “I want to spend more time with my daughter.”

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